Trump administration backs bills to toughen foreign investment rules

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U.S. President Donald Trump at the White House in Washington, U.S. January 23, 2018. REUTERS/Jonathan Ernst

WASHINGTON (Reuters) - The Trump administration supports bipartisan bills in Congress to toughen U.S. foreign investment rules amid growing concern about Chinese efforts to buy U.S. high-tech companies, the White House said in a statement on Wednesday.

The legislation would broaden the government’s power to stop foreign purchases of U.S. firms by strengthening the Committee on Foreign Investment in the United States (CFIUS).

The bills “would achieve the twin aims of protecting national security and preserving the longstanding United States open investment policy,” the White House said.

The bills, introduced in November by Republican Senator John Cornyn and Republican Representative Robert Pittenger, have Republican and Democratic co-sponsors. The Senate Banking Committee will hold a hearing on the topic on Thursday.

The legislation would expand CFIUS’ reach to allow it to review, and potentially reject, smaller investments and add new national security factors for CFIUS to consider. Those factors include whether information about Americans, such as Social Security numbers, would be exposed as part of the transaction or whether the deal would facilitate fraud.

CFIUS already has a reputation for being tough on high-tech deals involving China in particular and has blocked transactions that involve sophisticated semiconductors.

It has become more cautious since President Donald Trump was inaugurated a year ago amid growing political and economic tensions between the United States and China.

The panel has balked at approving a broader range of deals from China since the inauguration, according to lawyers who specialize in representing proposed transactions to the board.